Factors, Types And Penalties Of Insurance Fraud

Insurance fraud is when people deceive an insurance company to collect money they are not entitled to it. This fraud is a crime in all fifty states, and fraudulent claims can be either a felony or misdemeanor depending of course on the nature and extent of the fraud committed. Insurance companies can also commit fraud by denying a policy holder or health care provider a benefit that is due. If you have been charged with insurance fraud in Long Beach CA and want to know your options to avoid jail time or get out of it, read more.

You should be aware of the elements considered to be convicted of insurance fraud

Making a false or misleading statement

Insurance fraud requires that the defendant knowingly makes or misleads a false statement. If you make a mistake when filling an automobile insurance but you tell insurance company, it will not be considered as a fraud.

The false statement needs to be made in support of, or connection with a claim or payment that has been made already, or to be made under an insurance policy. This fraud includes false or exaggerated claim made by an insurance company or false statements made by medical providers to insurers about the services they performed before.

The statement might be material or be considered as valuable information for fraud convictions.

Types of insurance fraud

Healthcare: This happens when a person or business defrauds a health insurance provider. For example, a person lying about a fake injury to obtain payments or prescribed medication. This fraud commonly occurs when healthcare providers such as dentists or doctors, submit false claims they did not perform.

Automobile claims: Is when someone exaggerates or fabricates a claim made to their car insurance provider. For example, a person claiming that the extent of damage during his or her automobile accident was greater than it actually was just to obtain a larger payment.

Life: This is when a person attempts to get life insurance payments by creating their own or someone else´s death.

Property: This type of fraud focuses on houses, business or other insurance policies covering real property. A home or business owner that sets fire to his or her own property has committed insurance fraud.

Penalties

Soft fraud occurs when someone exaggerates an existing claim, such as overstating the damages of a car accident. Soft fraud is usually considered as a misdemeanor charge, punishable by fines, jail time up to one year, community service or probation.

However, hard fraud occurs when a person causes a loss for the purpose of obtaining insurance payments. Hard fraud is always considered as a felony offense, and it can be punishable by strict penalties such as spending a lengthy sentence in a state prison.

The penalties for insurance fraud vary widely depending on the state where the prosecution occurred. If you have been charged for any of these types of insurance fraud, it is important to obtain legal help as soon as possible. This video explains in detail how insurance fraud works.